Debt restructuring refers to a way for enterprises to adjust their debts through consultation with creditors when facing financial difficulties, so as to achieve financial stability and sustainable development of enterprises. In the process of debt restructuring, enterprises may have certain losses. According to the Provisional Regulations of People's Republic of China (PRC) on Value-added Tax, enterprises can apply for reduction or exemption of value-added tax for losses caused by debt restructuring.

Ways of debt restructuring:

1. Debt-to-equity swap: Debt-to-equity swap means that an enterprise converts part or all of its debts into equity, so that creditors become shareholders of the enterprise. This way can reduce the debt ratio of enterprises, reduce the pressure on funds and help optimize the capital structure of enterprises.

2. Bond swap: Bond swap means that enterprises use the original debt of New bond swap to reduce the debt cost and financial burden. This way can help enterprises to extend the repayment period, reduce interest expenses and improve profitability.

3. Debt extension: Debt extension refers to extending the original repayment period through negotiation between enterprises and creditors, so that enterprises have more time to raise funds to repay debts. This way can alleviate the short-term financial pressure of enterprises and win more development opportunities for enterprises.

To sum up, debt restructuring losses can be reduced by VAT, and enterprises can reduce their financial burden by applying for VAT relief, thus promoting the sustainable development of enterprises.

Legal basis:

Provisional Regulations of People's Republic of China (PRC) Municipality on Value-added Tax

Article 50

Taxpayers who need to reduce or exempt taxes due to force majeure or justified reasons may apply to the tax authorities. The tax authorities shall make a decision within 30 days from the date of receiving the application; If tax reduction or exemption is not granted, the applicant shall be notified in writing and the reasons shall be explained.